7 Tips for Starting a Retail Business

In a world of extensive style and cost diversity, starting a retail business can be tough. It’s even more difficult to lay a path to success as a small retail business as opposed to a chain store with grand advertising schemes and fat pocketbooks. Whether you design glitzy shoes, create hair accessories from recycled materials or think your modern dress line is the next Donatella Versace spring collection, your business has to start somewhere.

These seven tips to starting a retail business provide a springboard into a pool of ideas and plans:

1. Choose a realistic location

In the retail industry, your first thought might be to set up shop in a mall. After all, people flock to malls ready to spend and can be drawn in by the many other shops that share a building with yours. It’s like having extra advertising through free exposure to a steady stream of shoppers.

But a mall isn’t always your best location option for starting a retail business. Not every mall has a positive reputation, not to mention the expense. Think about where else might naturally attract shoppers or people with free time. For instance, acquiring space near a movie theater might be a less expensive alternative. Think of all of those people waiting for their movies to begin, sometimes with hours to spare.

2. Provide an atmosphere and theme to welcome customers

Starting a retail business includes making some big decisions – not only what to sell, but how to engage shoppers with the product line and how to invite the public into the store. Think about your favorite store. Does it play a certain type of music? What kind of colors, decorations, and designs are used? Is the lighting dim or bright? Are there many mirrors, large changing rooms, or personal shoppers to assist you? For a blooming retail establishment, it’s safer to keep colors bright, give ample light and space, and keep your organization simple.

3. Keep shelves/racks stocked with new, exciting merchandise

This tip is fairly self-explanatory. Customers who enter your store should be able to see a wide selection of what you have to offer, and returning shoppers should be drawn in by new pieces.

4. Be prepared to cycle through young employees

Retail employers, especially those just starting a retail business, typically hire waves of kids still in highschool or college. This is because most customer service positions offer minimum wage or require little previous training. For some, it will probably be their first job. As an employer, it is your role to encourage a positive experience but understand that employee retention might be smaller and lead to higher turnover rate. Young employees don’t always understand the responsibilities that go with a job or find that their academic schedule is much too demanding during the school year. Have a plan for employees that don’t show up, punch in late, or need to change hours.

5. Focus on hiring a manager

In starting a retail business, the hope is that you will be able to hire a manager who is your reliable second-in-command. A manager should have at least two years customer service experience in retail and at least one year managerial experience. He or she should be willing to fill in for employees or step up to the plate to learn and complete new tasks. Make sure this employee can think on his or her feet and solve problems without being monitored.

6. Expect theft

Unfortunately, in the retail industry, theft is inevitable – by employees as well as customers. Set up cameras as deterrents. Use security tags or locked cases for more valuable items. Train your team to spot suspicious activity. Some retailers try to make up lost money by setting prices higher, but be careful of this kind of practice. Staying competitive is more important than a single stolen t-shirt. Weigh these options by practicing regular inventory checks.

7. Schedule sales

One of the most classic advertising pitches for the retail industry is to have a sale! Blowout sales, back-to-school sales, annual sales, Black Friday sales – you see these left and right almost every week of the year. Sales make customers feel as if they are getting the best deal possible and that there is no better time to buy. As you are starting a retail business, consider designating a small section of your store for everyday sale items – things that have gone out of season or are low on stock.

Starting a retail business is easy, but being truly successful in the retail industry requires the foreknowledge of common hazards and the forethought to build a cohesive product line. Location, atmosphere, merchandise, the hiring process, employees, loss prevention, and sales all play a vital role in the first crucial stages when starting a retail business.

If the task of breaking out into the retail industry on your own seems daunting, buying into an established franchise or business might be right for your entrepreneurial needs. Sunbelt Business Brokers has thousands of business options waiting to be claimed. Take a look at the current selection!